Don't Rich People create economic growth?
Giving tax Cuts to Job creators creates more jobs since they own big corporations that employ lots of people.
Bottom Up approach makes everybody in poverty and welfare. Small Businesses only employ a little people. Giving Tax Cuts to them won't help the economy.
This is why Socialism is bad for economic growth.
- SocratesLv 77 years agoFavorite Answer
You are only partially correct. 55% (it used to be 65%) of all small business and their owners are effected by the $250K+ income tax bracket. Small business actually is what leads economies out of recession. Most jobs are created by them due to their sheer numbers. That is not to say the big corporations aren't important too. In April 2010, McDonald's was responsible for almost HALF the jobs created in the country in that month. The reason why they created so many jobs is because they got a waiver from Obamacare then.
When income taxes have been oppressively high, a cut in them has what has spurred economic growth. This effected any business owner, especially small business. Keep in mind, many small business profits and their owner income is one in the same, making the owner appear "rich" when they are not.
Corporate taxes have reached oppressively high limits. The US now has the highest in the world (35%). THAT, is what's driving the outsourcing. Romney and other Republican candidates understood this. This is why most called for lowering the corporate tax rate. In response Obama did to. That completely disappeared when he got re-elected. The positive economic influences of tax cutting is a foreign concept to him and Progressive Liberals. Even Classical Liberals, like JFK, understood it.
Here's a summary of income tax history. Warren Harding and Calvin Coolidge cut the highest income tax rate from 70% to 29% and cut government spending 50%. The result: the Roaring 20's and unemployment of less than 2%. JFK's posthumously passed income tax cuts (90% to 50%) also had a good effect on the economy, creating the revenues for LBJ's Great Society spending.
Reagan cut the highest income tax rate from 70% (again) to 28%, plus 15% across-the-board tax cuts. He also had the courage to tough out reigning in the money supply that was causing the crippling stagflation. Both of these policies created a new, a solid foundation for the country that supported a 17 year booming economy. Revenues during this time also doubled from $500 billion to $1 trillion. Unemployment dropped from 10.4% to 5%. Inflation dropped from double digits to about 2%.
Clinton cut the Capital Gains Tax. The already good economy went into overdrive. After implementation of the Tax Relief and Reconciliation Act of 2003 (part 2 of the Bush Tax cuts), unemployment dropped from 6.3% and kept on dropping into the 1st quarter of 2007 to a low of 4.4%. This increased revenue to the government. Each of his 2nd term yearly deficits step down significantly, starting with $600 billion, to a low of less than $200 billion in 2007, on track with the projection of a balanced budget in 2010. This, when Bush spending did not decrease. The economy grew at a rate of 3%. All of Bush's gains were blown out of the water by the mortgage meltdown, unrelated to the tax cuts.
Internationally, Margaret Thatcher lowered the highest tax rate from a stifling 95% to mid-thirties, creating an economic boom similar to Reagan’s economy. Post Soviet Russia’s economy was a shambles for years until Putin lowered the corporate tax to 13%. That is when it started to grow into a powerhouse. China flat out eliminated its capital gains tax to spur investment. Now, everyone wants to invest there and there is capital for all sorts of business. The economy is growing at 7.6% (it’s been as high as 13%).
Supply side economics provides positive, beneficial effects for the operation of a business. This can come in the form of tax cuts (the usual form), demand for it’s goods or services, reduced regulatory red-tape and it’s cost or other business-friendly policies. When implemented on a broad scope of the business environment and the economic problems that caused an economic downturn have been cleared enough out of the system, this translates into B2B spending, job creation due to expansion and other general trickle-down spending in the community. All this results in sustainable jobs not paid for by taxpayers. Revenues also increase to government coffers. Business friendly supply-side also makes it easier for start-ups to flourish, adding additional revenue.
Kudos to you for having the right attitude on job creation, taxation and Socialism though.
- ArnieLv 77 years ago
The Socialist ideology is a theory , fostered by a delusional, illogical minority and which holds forth beliefs that have no basis in reality. Under socialism, incentives either play a minimal role or are ignored totally. A centrally planned economy without market prices or profits, where property is owned by the state, is a system without an effective incentive mechanism to direct economic activity. By failing to emphasize incentives, socialism is a theory inconsistent with human nature and is therefore doomed to fail. Socialism is based on the theory that incentives don't matter!
In my opinion Communism is an extreme form of Socialism..
- Kiran CLv 77 years ago
No. Economic growth starts with having a better idea, product or service, not with after tax income. Businesses can pocket the tax cut money and let it sit idle in a bank account.
- 7 years ago
Nope. In my opinion, that's a myth. Everytime a huge corporation gets more profit, that profit is *not* re-distributed to people. Moreover, the percentage of people employed by huge corporations is not that big and of those who are, they do *not* make a substantial amount of money to live. That's why sweatshops and plantations, slums and people living in garbage dumps exist all over the world, despite so-called "development."
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- 7 years ago
Ever get a job from a poor person?
- Anonymous7 years ago
Then why are they singled out?
- A Letching GrayLv 47 years ago
very true and only a loony lefty would deny that basic fact
- footflash1Lv 67 years ago
Yes, you are correct.